ACADA

Saturday, 31 January 2015

MUSIC WAR: Jay Z to take on Apple and Spotify by buying streaming music services

Jay Z is set to become the
next big digital music mogul after making a $56m bid for Aspiro, the
Scandinavian company behind streaming services WiMP and Tidal.The bid made by Project Panther,
which is indirectly owned by the rapper’s company S. Carter Enterprises, has
been recommended to shareholders by Aspiro’s board.WiMP is a direct rival to Spotify
in its native Scandinavia, with a higher-resolution version called WiMP HiFi
that was rebranded as Tidal when it launched in
the UK and US in October 2014.The deal will pitch Jay Z into
direct competition with Beats Music, the streaming service co-founded by Dr
Dre, which was bought by
Apple as part of a $3bn acquisition of its parent company Beats
Electronics in 2014.That deal helped Dre top
Forbes’ annual Hip Hop Cash Kings list of rap’s richest figures for
2014, with estimated pre-tax profits of $620m, compared to Jay Z’s estimated
$60m that year.Aspiro will sit alongside Jay Z’s
other business ventures, which include the Rocaware clothing range, 9IX fragrances,
Roc Nation sports agency, Armand de Brignac Champagne and a stake in NBA
basketball team the Brooklyn Nets.In Aspiro’s last
public financial statements, it said that WiMP had 512,000 paying
subscribers, with 20,000 paying for its more expensive HiFi version that offers
higher-quality streams for twice the monthly cost.According to Aspiro, it began
talks with Jay Z’s company in December – the same month that Project Panther
was incorporated as a company in the UK. Aspiro’s board has published a
press release welcoming the offer.“The independent bid committee is
of the opinion that Panther, indirectly owned by SCE and controlled by Shawn
Carter, possesses the proprietary relationships, industry knowledge, as well as
economic strength and the necessary commitment in order to realise Aspiro’s
strategic plan of expanding the company’s business and brand globally.”Scandinavian media group
Schibsted, which owns 75% of the shares in Aspiro in a partnership with
retailer Platekompaniet and investment firm Verdane Capital, has already
accepted the offer.“Aspiro needs substantial
expansion capital and a strong and dedicated owner to be able to grow and
compete on the global music streaming market,” said its chief financial officer
Trond Berger.“Panther... has adequate
financial resources and a high level of competence in the music industry.
Hence, I think they will be a better owner to lift Aspiro and its advanced
music streaming service to a new level.”News of the potential acquisition
vaults WiMP and Tidal into what is shaping up to be a deep-pocketed battle for
dominance in the streaming music world in 2015. Apple is
expected to relaunch Beats Music under its iTunes brand in the
spring; Spotify is
reportedly raising $500m of new funding to fuel its growth; and
Google will surely turn the throttle up on its twin Google Play All Access and YouTube Music
Key services this year too.